14 The financial statements of Barker Office Furniture Compa

14) The financial statements of Barker Office Furniture Company include the following items: 2017 2016 Cash Short-term Investments Net Accounts Receivable Merchandise Inventory Total Assets Total Current Liabilities Long-term Note Payable $52,500 $49,000 17,000 99,000 159,000 144,000 531,000 551,000 267,000 292,000 55,000 32,000 92,000 60,000 What is working capital for 2017? A) $204,000 B) $68,500 C) $36,500 D) $90,500

Solution

Answer is B.

2017:

Total Current Assets = Cash + Short-term Investments + Net Accounts Receivable + Merchandise Inventory
Total Current Assets = $52,500 + $32,000 + $92,000 + $159,000
Total Current Assets = $335,500

Total Current Liabilities = $267,000

Working Capital = Total Current Assets - Total Current Liabilities
Working Capital = $335,500 - $267,000
Working Capital = $68,500